Expanding Your Business through Franchising
Most modern day businesses will strive to provide their customers with products or services and although many of these goods will belong to the company itself; there are some instances when a business may benefit from obtaining products from other sources. When dealing in a business to business (or B2B) environment, this activity can be split into two categories.
The first relates to sourcing products from a supplier and then selling those goods with their original branding. The second is often referred to as franchising and it involves coming to an arrangement with a manufacturer whereby they will permit the sale of their products and services, while the business is able to use the company name to do so.
Expanding your business through franchising
With the rising costs of manufacturer, the extensive laws relating to copyright and other factors often acting as barriers for companies; being able to franchise can take a huge weight off of an organisations’ shoulders. For a start, the potential to offer a variety of goods and products that may otherwise be unavailable or expensive to manufacturer can be very appealing.
In order to come to an agreement, both parties will have to mutually decide a method of payment. In some cases a manufacturer may be willing to accept 20% of the profit whenever one of their products are sold. In other cases a manufacturer may prefer to provide their products to a business interested in franchising for a set fee per item.
One of the most beneficial features of franchising is the ability to target a particular audience, without actually having to manufacture the type of product that they are after. By using someone else’s goods, it can be simple to focus on the sales and marketing, whilst reaping the rewards of the profits.
Some companies strive to obtain long term franchising deals and often feature another companies products on their website for years, while others may propose exclusive or limited options. In any event, and as long as an agreement can be reached, the potential to attract a wider audience either online or physically by using another niche of products can be very appealing.
Is this enough to help a company to grow?
If a company specialises in just a handful of products, then the chances are that they may struggle to appeal to a broader market that may be interested in other items. If they consider introducing a brand new range of goods to their website however, then this can open the doors to a fresh influx of traffic.
The more products that are available for sale, the more likely a wider audience will be of transacting. This can be a long term way to maintain profits; or a foot in the door for businesses that are keen to test the water with particular products, without having to invest in them using their own finances.